Hello, I’m excited to share my thoughts on the San Antonio Real Estate Market.
☛ According to Rocket Mortgage, they are still indicating it’s ever so slightly a seller’s market, a perspective I don’t quite agree with. It seems more like a neutral market to me. The number of active listings has increased slightly, from 7,680 to 7,815, but the number of homes sold has decreased month-over-month, dropping from 1,800 to 1,426. Property prices have remained stable, with Rocket Mortgage reporting an average of $289,000, a sentiment echoed by Redfin.
While there was a decrease in days on the market (57 to 53 days), there was also a slight increase in the number of homes selling below their asking price (from 51% to 52%).
☛ In our late August update, we’re observing almost 2 months of housing inventory on the market, up from 1.75 months last month but still below the historical average of 3 months.
Here are my thoughts on this: The lock-in effect is indeed real, with Zillow reporting that 80% of home mortgages have an interest rate below 5%. The perception of a “seller’s market” is more due to the lack of inventory rather than the overall strength of the housing market. It’s undeniably a stable market, characterized by a lack of significant increases in inventory or sharp price declines. However, it doesn’t appear to be exceptionally strong.
In my personal opinion, we may witness modest but noticeable price declines from now until January 2024, which is seasonally a slow period for the real estate market. If you’re in the market to buy, there might be opportunities for good to great deals, although what you find might not be perfect. Prime properties still tend to sell quickly with multiple offers.
Overall, I believe the San Antonio housing market is stable, and while we may experience slight price decreases this winter, I don’t see any indications of a significant collapse in the foreseeable future.
☛ Now, onto Bill’s business. If you remember last month, we had a house we couldn’t sell because it had plumbing problems. We ended up adding that house to our rental portfolio. We also picked up a second house but we are not sure if we are going to rent or sell that house yet. The house that we cleaned out but didn’t fix anything that went under contract last month……….is still under contract. With any luck we on that house at the end of the week. We also had a house that we are selling from the rental portfolio. That house went on the market just as school was starting. I thought it was priced right but had very light traffic, maybe because school was starting. I don’t know. I cut the price 5% and we saw the showings pick up. It is under contract now for about 92% of list price if you include the concessions. However, it went under contract in about 22 days, so that was good news. In other news, the flip that we are doing had to have the foundation repaired which then broke the plumbing. That is not good, and we are working thru that now. The duplex that we have under contract has finished the next step in the probate process and we hope to have buy that property in early September.
Our business has had a very busy summer and we have learned a lot of lessons. We see some things getting better as we start to dial in our processes. We are going to continue to work diligently on our business to the point where it is a well-oiled machine that I believe it will be.
☛ Now, let’s talk about the San Antonio multi-family market. I have heard of 1 deal occurring in my network and a couple of deals in Dallas. My mentor got a 292-unit apartment complex under contract in San Marcos. That is good for him and good for the market. One of the syndicators I follow up with in Dallas just released a new development syndication. Mostly though it is really quiet. I have heard that sellers are starting to come down on their asking prices, but it seems like everyone is just holding their breath to see what happens.
My friend that does new multi-family development, their business has been very slow with no new development deals in the last year. They recently won their first new development project in a year, but not in San Antonio, in Dallas. They are super happy about the work, but they don’t do a lot of work in Dallas so it will be a little bit of a challenge for them.
My prediction is that in the short term, you are going to see multi-family prices decrease around 10% from pandemic highs. This will be needed so that properties will cash flow at these higher interest rates. I also predict that over the next several years multi-family rents are going to go up in San Antonio because there is a lack of new construction right now. This is probably a good thing because I think that San Antonio was probably overbuilding in the years leading up to the interest rate increase.
I still feel very lucky that the property where I am a General Partner, the Annex, is going well. Rent collections have been excellent, and tenants appreciate the upgraded apartments and are willing to pay a little more for them. I am excited to see how the new management company does and if they are able to boost our bottom line on that property.
☛ In summary, the San Antonio multi-family market seems subdued, with a few notable deals indicating some activity. I believe that multi-family prices will continue to decrease from pandemic highs due to high interest rates. However, there’s an encouraging expectation of multi-family rent growth in the next few years, driven by San Antonio’s population increase and limited new multi-family construction.
☛ While, the San Antonio single-family market appears healthy, transitioning towards a more balanced market, and I expect slightly lower home prices over the winter months which is normal for this time of year. We plan to continue buying but will adjust our offers slightly to align with the slower market dynamics. Given all the information that I follow, I am confident that there will not be a collapse in single-family home prices in San Antonio in the foreseeable future.
☛ On another note, my wife bought and sold her first land deal in Spring Branch, TX. She was very happy with the deal, she made more than she makes in a month as a teacher and developed some useful contacts. Between my business and my wife’s business, we are always looking for money. We are either looking for people to lend money to our purchases or we are looking for people to buy our properties. If either of these is interesting to you or you would like more information, please contact us at firstname.lastname@example.org or call me at 210 960-6543.